The broad S&P 500 is on a four-day losing streak, having shed nearly 2% over the period. Meanwhile, the Dow has lost 265 points in the last three trading days.

Analysts have cited growing concerns about the global economy and future corporate profits as leading reasons for the swift decline seen on Wall Street.

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There were a handful of economic reports that helped shed more light on the situation.

The Labor Department reported new claims for unemployment benefits fell to 339,000 last week from an upwardly revised 369,000 the week prior. Claims were expected to rise to 370,000 from an initially reported 367,000.

The Commerce Department said the U.S. trade deficit widened to $44.2 billion in August from $42.5 in July. Economists were expecting a deficit of $44 billion. A separate report showed U.S. import prices rose 1.1% in September from August, topping estimates of 0.7%. Export prices rose 0.8%, coming in ahead of estimates of 0.4%.

On the European front, Standard & Poor's chopped Spain's credit rating down two notches to 'BBB-' as the country faces mounting economic and political pressures. The rating now stands just one level above junk status. S&P also kept its outlook on the embattled country at negative.

Traders broadly shrugged the move off. Dan Greenhaus, chief global strategist at BTIG, wrote in a note to clients that "there isn’t much surprising in the rationale" S&P used.

In commodities, oil prices rallied ahead of the weekly inventory report from the Energy Department. The benchmark contract traded in New York climbed $1.14, or 1.2%, to $92.38 a barrel. Wholesale New York Harbor gasoline slipped 0.18% to $2.954 a gallon.

In metals, gold prices rose $8.50, or 0.48%, to $1,773 a troy ounce.

Foreign Markets

The Euro Stoxx 50 rose 0.3% to 2463, the English FTSE 100 gained 0.6% to 5811 and the German DAX climbed 0.58% to 7247.

In Asia, the Japanese Nikkei 225 slipped 0.58% to 8545 and the Japanese Nikkei 225 rose 0.38% to 20999.